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2018 (6) TMI 297 - HC - Income TaxComputation of capital gains - Disallowance of brokerage u/s 48 - Held that - Property was in Bangalore, the brokerage was paid for the services rendered to the assessee - such expenditure would be permissible for the transfer of an asset, but the burden was on the assessee to demonstsrate that the expenses had been incurred - thus AT was satisfied that brokerage commission is paid by way of a cheque - hence deduction is allowed. Trading liability u/s 41(1) - Held that - Here was no question of adding the amount received by the assessee from her father for purchasing a house property to her income since section 41(1) (a) does not apply here - Decided in favor of assessee.
Issues:
1. Disallowance of brokerage under Section 48 of the Income Tax Act, 1961. 2. Addition on account of perceived cessation of liability under Section 41(1) of the Act. Analysis: 1. Issue 1 - Disallowance of brokerage under Section 48: The Revenue challenged an order by the Appellate Tribunal regarding the disallowance of brokerage amounting to about ?4 lakh. The assessee argued that the brokerage was paid for services rendered in Bangalore. The Tribunal referred to a judgment from the Pune Bench, stating that the deduction for such expenditure would be permissible if the assessee could prove the expenses were incurred. The Tribunal found that the brokerage commission was paid to Sood Realtors and Developers by cheque, supporting the Commissioner (Appeals)'s decision to allow the deduction. It was concluded that no question of law was involved in this issue. 2. Issue 2 - Addition on account of trading liability under Section 41(1): Regarding the addition of about ?46 lakh due to perceived cessation of liability under Section 41(1) of the Act, it was noted that the assessee had been assessed individually for previous years and had received an amount from her father for purchasing a house property. The Appellate Tribunal determined that Section 41 did not apply as it falls under profits and gains of business or profession, and thus, the amount received for purchasing the property should not be added to the assessee's income. The Tribunal's decision was deemed appropriate upon considering the assessee's status. In conclusion, the appeals (ITAT No. 362 of 2016 and GA No. 2807 of 2016) were dismissed, and no costs were awarded.
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